A California healthcare system has become the latest dropout from the Pioneer Accountable Care Organization program, despite reducing skilled nursing facility utilization and improving its readmission rates. Sharp HealthCare announced its decision in a quarterly financial statement released Tuesday.

The San Diego-based system of five hospitals achieved “meaningful reductions” in SNF and hospital utilization but still was at risk for a “significant shared loss” if it remained in the Pioneer program, according to the quarterly report. This is because the financial model used by the Pioneer program does not make adjustments for regional factors, such as a substantial wage index increase in San Diego, Sharp leaders explained.

The Pioneer ACO program began two years ago with 32 participants. Sharp HealthCare is the 10th to pull out. Results have been mixed, with many of the ACOs achieving quality improvements but fewer reducing costs enough to gain shared financial rewards.

The Pioneer program was designed for healthcare systems that already had a high level of coordination in place across the continuum of care, and were willing to take on greater risk for greater potential rewards, according to the Centers for Medicare & Medicaid Services. The Medicare Shared Savings Program is another, more widespread model for ACOs.

Despite the attrition from the Pioneer program, many experts have said that ACOs and similar models will continue to expand, and payment for services inevitably will be tied to acute and post-acute care coordination. They have said long-term care providers should be actively trying to align themselves with ACOs and similar organizations.

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